Report: Power gen industry will adapt to comply with Clean Power Plan

7.9.15

A report from the Advanced Energy Economy Institute (AEE Institute) says the power generation industry will come up with options to comply with the U.S. Environmental Protection Agency’s (EPA) Clean Power Plan under potential market-based mechanisms.

The report, “Markets Drive Innovation: Why History Shows that the Clean Power Plan Will Stimulate a Robust Industry Response,” says that the structure of EPA’s proposed plan and large existing markets for advanced energy technologies and services that can be used as compliance measure will allow the market to develop rapidly. A review of prior EPA regulations that allowed for market-based compliance, such as emission reduction credit trading, resulted in a similar market response.

Technologies that can aid in CPP compliance include a range of advanced energy products and services currently available, the report said. Utilities and power plant operators already engage in a variety of markets to procure advanced energy, from direct purchase or operation of renewable energy sources, to investing in energy efficiency programs. Many of these same entities have started the process of adapting existing mechanisms to support CPP compliance.

“The market readiness of a wide array of compliance measures available to respond to a market signal for emission reductions indicates that compliance under the CPP will likely mirror not only the approach, but also the success of market-based compliance outcomes under prior CAA rulemakings,” the report said. “Robust markets for advanced energy technologies and services, coupled with existing tracking systems customized to meet CPP requirements, together provide a nearly turkey solution for state compliance needs, ready to deliver emission reductions as soon as the implementation begins.”

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